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Flurry of denials, from Ottawa to Montreal, prompted by Quebec controversies

The Canadian Press
Published Wednesday, October 17, 2012 6:32AM EDT
Last Updated Wednesday, October 17, 2012 11:56PM EDT

People were lining up to defend their reputations Wednesday amid the torrent of allegations swirling around in Quebec, where a corruption inquiry has rattled the political system.

The devastating testimony heard so far has dented reputations in Montreal, in different parts of Quebec, and it has also left its mark on the federal scene.

People have begun fighting back on multiple fronts: at the federal level, the provincial level, the municipal level, a provincial agency and at the inquiry itself.

In Ottawa, Conservative Sen. Leo Housakos distanced himself from one of the people accused of wrongdoing in the testimony.

Housakos told reporters he never urged anyone in the Harper government to have Robert Abdallah appointed as the head of the Port of Montreal. He confirmed that he knew Abdallah but said he wasn't involved in getting the Prime Minister's Office to promote his ultimately unsuccessful candidacy.

"He never asked me to intervene. I never had a conversation with Mr. Abdallah nor with anyone else on that subject," Housakos said.

"The first time I heard anything about this was in the newspapers."

The senator issued that denial as Abdallah himself was preparing to go public with his own counter-attack.

A former Montreal city manager, Abdallah has called a news conference for Thursday to address allegations about a $300,000 kickback allegedly destined for him. He is expected to refute, "point by point," the allegations that have been made about him, a statement released Wednesday said.

A senior executive at Quebec's provincial gaming corporation was also scrambling to protect his reputation.

Pierre Bibeau, a prominent organizer in the provincial Liberal party, has been temporarily reassigned from his job as a vice-president at Loto-Quebec while he fights to clear his name, according to a statement Wednesday.

Bibeau is alleged to have solicited and received a $30,000 cash donation from a former construction company boss for a fundraiser featuring his former spouse, who was then Quebec's environment minister. A witness has testified that the transfer took place inside the gaming corporation's offices.

In a statement, the Crown corporation announced Bibeau had agreed to the reassignment. Bibeau was in charge of public affairs and communications.

"(Bibeau), like any other citizen, enjoys the presumption of innocence, and he has in a statement strongly condemned the allegations of the witness against him," Loto-Quebec said in a statement.

His reassignment came one day after construction magnate Tony Accurso announced his retirement while denouncing the testimony heard at the inquiry.

He had denied testimony that he called in a Mafia don, Vito Rizzuto, to have a chat with his business rival Lino Zambito when he wanted to compete for a lucrative public contract.

This week's events were just some of the fallout from spectacular allegations of Mafia ties, bid-rigging and illegal political financing during eight days of testimony from Zambito, an ex-construction boss.

His allegations about Abdallah brought the inquiry uncomfortably close to the seat of federal power.

The Prime Minister's Office originally tried to have Abdallah appointed in 2007 to run the Montreal port -- a spot which holds strategic economic importance. His candidacy was resisted by the port authority's board, and he was ultimately rejected.

A mysterious audio recording surfaced last year, in the midst of a federal election campaign, that hinted at a nexus between Accurso, Abdallah and the federal government. Abdallah once worked for Accurso and also knew Housakos from the senator's days working for the municipal government.

The recording purported to feature a chat between Accurso and another construction executive; two voices could be overheard discussing plans to use Housakos to get an influential friend in the PMO -- Harper's then-spokesman Dimitri Soudas -- to push Abdallah's candidacy.

Housakos was asked why his name came up on that tape.

"That's a very good question. A very good question," he told reporters during an exchange after the weekly Conservative caucus meeting.

"The only thing I can tell you is that I never tried to influence a political decision of the federal government. Period."

Meanwhile, the inquiry testimony was being challenged on other fronts; lawyers spent a second day cross-examining Zambito on Wednesday.

A lawyer for the City of Montreal was challenging the star witness to explain memory gaps and seeking inconsistencies in his story.

City lawyer Martin St-Jean questioned Zambito on specifics about a city contract Zambito said Abdallah tampered with through an intermediary -- an engineer overseeing the work.

Zambito said that he never met directly with Abdallah or discussed the matter with him and he doesn't know if the cash he paid was ever actually turned over to Abdallah.

"There was an engineer who was representing the city who told me that the contract would be authorized if I bought ... extra piping," Zambito insisted.

"I told you what was reported to me by the engineer who is representing the city who is contact with Mr. Abdallah."

A number of city employees and the mayor's party were accused by Zambito of taking kickbacks on contracts. But the ex-construction boss has occasionally come up short when pressed for specifics.

For example, Zambito could not put a dollar figure on the three per cent cut of rigged contracts that he allegedly paid to Mayor Gerald Tremblay's Union Montreal party through a middleman, Nicolo Milioto.

On the subject of local engineers and planners who were allegedly on the take, the city lawyer questioned Zambito about the numbers and amounts paid. This was after Zambito had stated an engineer claimed a cut on inflated costs, while another took one per cent of the value of rigged contracts.

Zambito said the practice was discussed among contractors and, although he never saw anyone else pay, he insisted he paid in cash. He said the exchanges took place in various locations around town, without witnesses.

"It was the rule," Zambito said.

Zambito couldn't say how many times he'd worked with different city employees that he'd named.

St-Jean expressed frustration that the reputation of city employees had been tarnished while Zambito couldn't provide more specific information.

"It's easy to throw names out there but, at some point, you have to come back with solid details," St-Jean told Zambito.

The commission chair appeared to defend the witness.

"In an inquiry, you have to start somewhere and the evidence will come gradually over time," France Charbonneau said.

Earlier in his testimony, Zambito explained that certain companies, including his own, operated as a cartel.

He testified that these companies colluded to drive up the cost of contracts with a 2.5 per cent commission going to the Italian Mafia on rigged contracts.

He has also said that, in 2005, he began paying the equivalent of three per cent in kickbacks to the ruling political party in Montreal. Over a longer period, he said he was paying additional bribes to city engineers and bureaucrats.

He has also said that he's heard that a 2.5 per cent cut of contracts in Laval, north of Montreal, went directly to that city's mayor, but he never paid that amount himself.

Zambito has also admitted to illegally funding political parties at the provincial level. The inquiry says it will not explore whether such wrongdoing occurred at the federal level.

None of Zambito's allegations have been proven in court. As many as half-dozen lawyers could choose to cross-examine Zambito.

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Photos

A woman walks by a sign pointing towards a security checkpoint in Montreal, Monday, June 4, 2012 at a Quebec inquiry looking into allegations of corruption in the province's construction industry. (Graham Hughes / The Canadian Press)

Former Montreal city manager has been accused of allegedly accepted a $300,000 kickback on a single contract.